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Lakshmi Machine Works to buy Rieter’s share in JV
Lakshmi Machine Works (LMW) has announced buying out Rieter’s share in its JV, Rieter
LMW Machinery Ltd. (RLM). Currently, the holding of the JV is 50:50. Rieter had offered to
sell its holding of 50% shares in RLM to LMW, which the latter has accepted. The value of
shares will be determined as on June 30, 2011.
Once the process of disinvestment by Rieter is complete, RLM will become a wholly owned
subsidiary of LMW. The turnover from this JV was around `63cr. We believe the impact of
this development would be limited, as Rieter already has a presence in India as an
independent entity. At the CMP, the stock is trading at 9.1x FY2013E EPS. We maintain our
Buy view on the stock with a target price of `2,947.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Lakshmi Machine Works to buy Rieter’s share in JV
Lakshmi Machine Works (LMW) has announced buying out Rieter’s share in its JV, Rieter
LMW Machinery Ltd. (RLM). Currently, the holding of the JV is 50:50. Rieter had offered to
sell its holding of 50% shares in RLM to LMW, which the latter has accepted. The value of
shares will be determined as on June 30, 2011.
Once the process of disinvestment by Rieter is complete, RLM will become a wholly owned
subsidiary of LMW. The turnover from this JV was around `63cr. We believe the impact of
this development would be limited, as Rieter already has a presence in India as an
independent entity. At the CMP, the stock is trading at 9.1x FY2013E EPS. We maintain our
Buy view on the stock with a target price of `2,947.
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